To achieve scalable reach on the web, BT networks really developed a somewhat better form of mass advertising in that it is targeted to an audience whose behaviors (or interests, really) are inferred from context. Even remessaging to a site’s previous visitors doesn’t automatically tap you into consumers’ propensity to buy. Maybe they just like your site and never buy. Or they already bought and won’t do so again for a long time.

True behavioral marketing online uses actual shopping and purchase data, a multitude of variables (including likelihood NOT to buy) and analytics. Post-1993, you need to model massive amounts of actual shopping data to best predict purchase intent.

I think in many cases, on those 1st 3 Bands you simply get what you can get and that has to be good enough because there is no rigorous way to prove customer value generation.

For example, I think people are spending way too much time on trying to “measure the value” of social media. That’s like measuring PR; it simply is what it is. Can be nice to have, can be bad. Try not to generate “bad social” (or PR) if you can.

I’m not saying don’t *track activity* in these 3 bands, I’m saying if you can’t truly measure the end $$ value of it, don’t bother trying, don’t kid yourself. It just is what it is.

You can create all kinds of formulas if you want to, but the reality is that “X number of PR mentions on TV” rarely ever equals the value of a TV spot. And even if it does, you’re talking media value, not customer value. Not the same thing. The real question is this: how does media value created translate into customer value, what kind of profit was generated? More on this below.

Clearly Band #3 is something the auto industry understands - it’s the product, or what we would call at HSN the Merchandising, which for you probably happens in Design / Engineering. It’s the feature sets, the compatibility, the colors, the packaging. I assume you have some primary research that gets done around that. As far as Optimizing, you may need more Marketing or Customer Service input, for example - are the Engineers really building what the customer wants?

This is where your call center could provide input, you could look at return / refurbish rates in the data warehouse, service calls, etc. and trend those over time. Lower return rate, product is better. Less info calls on how to operate it, design / instructions have improved. That kind of thing. This is relatively “hard data” and even though you might not be able to put a $$ value on it, it’s quite tangible from a customer experience and therefore “likely to buy again” perspective. Lacking hard data, “Satisfaction” or NPS.

For Band #2, since this is the Distribution level, it would be highly appropriate to interview store managers / salespeople - is it easy to sell? What are the Objections? Does the packaging work for you or against you? Optimizing means addressing those issues.

You could also make the argument that any well established channels for professional product reviews, meaning expert commentary and endorsement from audio magazines, or car mags, or Consumer Reports, or whatever, are in Band #2. These are part of “Distribution” but certainly leaning towards Band #1. Track and trend all the sources, positive and negative reviews.

Band #1 is the Mass Communication level, the least targeted but potentially has largest reach. Certainly you could try buying cable TV, let’s say the SPIKE channel or ESPN, advertise in auto mags, etc. How will you know it’s effective? Either design that into the campaign or forget about it. You can certainly do “awareness studies” and “marketing mix” and all that, but these are very hard to turn into hard $$ value generated if you’re not P & G.

At HSN, we could do geographically controlled market tests and proved that mass media did not deliver a financial benefit anywhere near it’s cost, so we killed all of it. The media value did not translate into customer value. Doesn’t mean the media had no value, just that we couldn’t convert the media value into customer value, or cross this media value over into Band #4, if you will. This concept of “crossing over value” is really no different than understanding how much you pay for PPC clicks relative to the profit you generate, just using a different media.

The social “buzz” kinds of things are probably very appropriate to track for this product category. How many product mentions on auto blogs, Facebook / Myspace / Flickr if appropriate; how many phrase matches in Google, etc. Compare to any trends you have for similar product launches, lined up by launch date. For example, 2 months after launch of Version1 we had 40,000 Version1-specific Google phrase matches; 2 months after launch of Version2 we had 70,000 Version2-specific phrase matches. Good!

But in my opinion, the value of this buzz media was created back in Band #3, where you were listening to Customers, Marketing and Service and designed a product that is worthy of the buzz it generates. If you fail in Band #3, you fail in Buzz. In other words, the value of the buzz media generated is a result of investments at Band #3, not “new value”. Same thing with Service related Buzz; it’s created through Optimizing procedures, right-sizing policies and training / empowering service people.

Can you measure the hard $$ value of this buzz activity? No. But you can make a judgment as to whether it’s good or bad, and that just is what it is. It’s additional anecdotal stuff that either confirms or brings into question the hard data sets you get into as you move into Band # 4, where you are talking about the value of customers as opposed to the value of media.

Hope the above helped!

It may not matter in the scheme of things but let me defer to your expertise… Can this be done in the auto world? Any thoughts?

I like the language you used - “progressively refining” based on value and the idea of “Bands”. Perhaps communications are Banded, customers are Segmented? A Matrix? In other words, within each “Band”, there are still different Customer Segments, though this is much less clear in the higher Bands.

Maybe rather than a funnel, what we have here is more like a series of screens, with smaller and smaller holes as you approach the bottom? Like the way soil is screened for different sized rocks and sand, by shaking a screen table?

If so, perhaps these screens are called “Relevance” and Marketing is the motor doing the shaking?

Anyone else care to jump in with their own language on this optimization model? To be clear, the Tools / Tactics listed are what was left after optimization for each Band. For example, TV, Radio, Newspaper, TV Guide were all kicked out of the top Band.

For some reason I couldn’t get it into my head that the communication to customers would be banded (segmented?) that way. Seeing the diagram like that - with the explanations of what each means - makes it so much clearer!

Just don’t let Judah know that his earlier comment(s) went right over my head. ;-)

Again thanks!
Cheers!
- Steve